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Commodities Daily Report

Saturday| May 11, 2013

Agricultural Commodities

Content
News & Market Highlights Chana Sugar Oilseed Complex Spices Complex Kapas/Cotton

Research Team
Vedika Narvekar - Sr. Research Analyst vedika.narvekar@angelbroking.com (022) 2921 2000 Extn. 6130 Anuj Choudhary - Research Analyst anuj.choudhary@angelbroking.com (022) 2921 2000 Extn. 6132

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Commodities Daily Report


Saturday| May 11, 2013

Agricultural Commodities
News in brief
Revision in Minimum Initial Margin on Wheat and Sugar futures
The Trading and Clearing Members are hereby informed that as per the Byelaws, Rules and Regulations of the Exchange and as directed by the Forward Markets Commission, the Minimum Initial Margin has been revised to 5% of the value of the contract or VaR based margin whichever is higher and will be imposed on all running contracts and yet to be launched contracts of Wheat (Symbol: WHTSMQDELI and WHEAT) and Sugar (SUGARM200) with effect from beginning of trading day Monday, May 13, 2013. (Source: NCDEX)

Market Highlights (% change)


Last Prev. day

as on May 10, 2013


WoW MoM YoY

Sensex Nifty INR/$ Nymex Crude Oil - $/bbl Comex Gold - $/oz

20083 6095 54.81 96.04 1437

0.72 0.74 0.82 -0.36 -2.18

2.59 2.54 1.86 0.45 -1.88

9.06 9.64 0.72 1.48 -7.80

22.31 22.74 2.91 -1.07 -9.92

.Source: Reuters

Cheaper AP turmeric grinds Erode varieties


Spot turmeric prices are on the decline as exporters prefer cheaper Andhra turmeric to the Erode varieties.Arrival of turmeric from Nizamabad led to decrease in Erode turmeric price. Price of the Andhra Pradesh turmeric is Rs 1,200-1,500 a quintal lower than at Erode, said R.K.V. Ravishankar, President, Erode Turmeric Merchants Association. He said that some upcountry merchants are placing direct orders from other centres such as Warangal, Odisha and Assam and are buying some quantities but are placing negligible orders for quality Erode varieties. Still, traders are keeping good number of root variety stocks with them, awaiting orders from Delhi. On Friday, only 3,300 bags of turmeric arrived for sale, but only 60 per cent was sold. At the Erode Turmeric Merchants Association sales yard, the finger variety was sold at Rs 4,6997,514 a quintal and the root variety Rs 4,199-6,399. (Source: Business Line)

Cane arrears in U.P. touch record Rs 6,308 cr


Sugarcane arrears have hit a record high, exceeding Rs 6,308 crore, in Uttar Pradesh on delayed payment by millers even as crushing in the current season ending September has come to an end. However, the rising arrears do not seem to deter UP farmers from planting cane for the next season as no other alternative is seen matching sugarcane in terms of returns since the price is fixed by the State Government. UP is followed at a distance by Karnataka, the third largest sugar-producing State, where dues to cane growers are estimated at over Rs 1,600 crore. The all-India cane arrears are said to have crossed Rs 12,300 crore, according to the Food Ministry. For this build-up in cane arrears, millers blame the high cost of production driven by a high cane price and lower-than-expected realisations. (Source: Business Line)

Global Grain, Soybean Crops Seen Rising to Record by USDA


Global farmers will harvest the biggest grain and soybean crops ever this year, boosting food reserves to the highest since 2000, the U.S. government said. Corn, wheat and oilseed futures in Chicago slumped. Combined production of the three crops will jump 9.6 percent to 1.952 billion metric tons, the biggest increase since 2004, the U.S. Department of Agriculture said today in a report. While lower prices will increase consumption, world stockpiles will jump 13 percent to 416 million tons, the highest since 2001, the agency said. After the most-severe U.S. drought since the 1930s drove corn and soybean prices to record highs last year, grain and oilseed futures have plunged more than 20 percent, curbing food costs. Average U.S. cash-corn prices will fall 32 percent in the year that starts Sept. 1, while soy-based animal feed may drop 29 percent, boosting meat and milk production, the USDA said. (Source:
Bloomberg)

Indias cotton exports may drop by 34% in 2012-13


Indias cotton exports are expected to exceed the earlier estimate to touch 9.2 million tonnes in 2012-13 marketing year ending July, but they are likely to remain down by 34 per cent from the previous year level, a latest USDA report said. The country had exported 14.17 million bales of cotton in the 2011-12 marketing year (August-July). One bale contains 170 kg of cotton, it said. In its latest report, the US Department of Agriculture (USDA) said that it has upped Indias cotton exports forecast to 9.2 million bales from 7.2 million bales for 2012-13 marketing year. Till last month, export registrations have reportedly reached 8.9 million bales with shipments surpassing 8.5 million bales for 2012-13, the USDA said in the report. Exports in April were significantly lower at 2,00,000 bales as exports to China came to a near halt, it said. (Source: Business Line)

Record US corn, soybean crops to end supply squeeze


Record-large U.S. corn and soybean crops will end three years of punishingly tight supplies but the winter wheat crop is smaller than expected, the government said on Friday. Grain traders have been bracing for an onslaught of supply in the coming year, but ending stocks for the new crop of corn and soybeans would still be slightly larger than expected. In its first projection of the fall harvest, the Agriculture Department said the corn crop would be a record 14.14 billion bushels despite a late start to the planting season that will lower yields. All the same, U.S. corn ending stocks for 2013/14 would hit 2.004 billion bushels, said USDA, nearly triple the 759 milion forecast for the Aug. 31 end of this marketing year and marginally above the trade estimate.
(Source: Reuters)

Rice Sown in 1.88 Lakh Hectare so Far as per Preliminary Reports


Preliminary reports of crop coverage in the kharif season have started coming in. As per data available from different States, rice has so far being planted in 1.88 lakh hectare. This is less as compared to rice planting at this time last year (2.26 lakh), mainly because of late sowing in Assam and Orissa. Sugarcane has been planted in 40.3 lakh hectare as compared to 45.54 lakh hectare at this time last year. Less area is reported mainly in Karnataka, Maharashtra, Tamil Nadu and Uttar Pradesh. Jute and mesta have been planted in 6.86 lakh hectare as compared to 6.4 lakh hectare last year. (Source: PIB, GOI)

Sugar may gain once Maharashtra stir ends


Sugar prices, which are affected by the ongoing strike by traders and a tepid demand, are likely to go up soon due to high temperature. Sugar merchants said mills are selling at a price below their cost of production to pay farmers their dues. Demand for sugar is tepid after Diwali but the supply is ample. Once the strike gets over, demand from traders is expected to spurt due to high temperature. (Source: Business Line)

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Commodities Daily Report


Saturday| May 11, 2013

Agricultural Commodities
Chana
Chana June futures continued to decline yesterday on account of higher supplies of the new crop coupled with higher output estimates and settled 0.29% lower on Monday. However, demand from stockists at lower levels has cushioned sharp downside in the prices. Lower yield in MP due to unseasonal rainfall in February have also supported prices at lower levels. The supplies are expected to slow down towards the end of the month. Higher supplies of the new crop from the major producing states such as Madhya Pradesh, Rajasthan and Maharashtra is seen pressurizing prices in the physical markets. Concerns over the yield in Madhya Pradesh, the largest chana producing state, due to unfavorable weather conditions has been seen supporting prices at lower levels. Chana prices may find support at lower levels as stockists will build inventories at lower levels to meet the demand for the entire season.

Market Highlights
Unit Rs/qtl Rs/qtl Last 3397 3356 Prev day 0.86 -0.03

as on May 10, 2013 % change WoW MoM -1.04 -4.72 -2.58 -5.84 YoY -20.62 -20.29

Chana Spot - NCDEX (Delhi) Chana- NCDEX May'13 Futures

Source: Reuters

Technical Chart - Chana

NCDEX June contract

Demand supply scenario


Higher returns earned in 2012, coupled with a hike in minimum support prices (MSP), have helped expand overall acreage in 2012-13 season. The Centre has hiked the MSP by 14 per cent to Rs 3,200 a quintal for chana and as part of its strategy to encourage farmers to grow more pulses to reduce import dependence. Chana sowing in the current season is 5.65% higher at 95.17 lakh ha compared to previous year. Acreage is up in Rajasthan, Maharashtra, MP and AP at 15.7 lakh ha, 12.53 lakh ha, 32.99 lakh ha and 7.33 lakh ha respectively. According to third advance Estimates released on 3 May 2013, Total pulses output for 2012-13 season has been pegged at 18 mn tn, up 5.76% compared to previous year. The target for 2012-13 pulses crop output was set at 18.24 million tonne during the year. Out of the total pulses output, kharif output is estimated at 4.03% lower at 5.95 mn tn while rabi pulses output is pegged 9.25% higher at 12.05 mn tn compared with the final estimates of 2011-12. Chana output is pegged marginally lower to 8.49 mn tn compared with its second advance estimates of 8.57 million tonnes. However, chana output is expected to breach its 2010-11 record of 8.2 mn tn in 2012-13. Erratic weather in M.P. lowered the yield. Assocham estimates, 21 mn tn of pulses demand in 2012-13 and is likely to reach at 21.42 mn tn in 2013-14 and 21.91 MT in 2014-15. (Source:
Agriwatch).
rd

Source: Telequote

Technical Outlook
Contract Chana May Futures Unit Rs./qtl Support

valid for May 11, 2013 Resistance 3450-3485

3380-3400

Trade Scenario
According to IBIS, imports of chana in the month of February declined to 0.46 lakh metric tonnes compared to 2.31 lakh metric tonnes during the previous month. India imports Chana mainly from Australia and Canada and higher availability in these countries at comparatively cheaper rates is seen boosting imports of Chana to meet the domestic shortfall. In Australia, total chickpea production in 201213 is estimated to have increased to a record 713000 tones as compared with 485000.

Outlook
Chana prices are expected to continue to trade with a negative bias in the intraday. Higher supplies of the new crop are expected to pressurize prices. However, value buying may emerge at lower levels. Improvement in demand from stockists may also support prices at lower levels. Overall output in the current season is comparatively higher and thus no major upside is expected over a medium term.

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Commodities Daily Report


Saturday| May 11, 2013

Agricultural Commodities
Sugar
After gaining over the preceding two sessions, Sugar Futures corrected from higher levels on account of profit taking and settled 0.66% lower. Sentiments turned optimistic after the government notified the cabinet committee on economic affairs (CCEA) decision to remove two key controls on sugar sector. Improving demand from bulk consumers and expected lower output next season in Maharashtra also supported an upside in the prices. However, higher supplies have capped sharp gains. Sugar prices in the domestic markets have consolidated at lower levels over the past couple of weeks as higher supplies was offsetting summer season demand in the physical markets. The Government has cleared the partial decontrol of sugar on April 4, 2013, however, notified the same after almost a month. According to this, the government will now have to buy sugar from the mills at open market prices. Also the release mechanism will be done away with, after September 2013. States will decide on the FRP of cane. India's sugar output is set to decline 10-15 per cent in the 2013-14 crushing season due to lower cane availability from drought-hit Maharashtra districts, where sowing could not be finished or crops were damaged due to lack of monsoon showers in 2012. (Source: Business Standard.

Market Highlights
Unit Sugar Spot- NCDEX (Kolhapur) Sugar M- NCDEX May '13 Futures Rs/qtl Last 3062

as on May 10, 2013 % Change Prev. day WoW 0.44 0.67 MoM 0.64 YoY 3.33

Rs/qtl

3016

-0.03

2.94

3.96

4.36

Source: Reuters

International Prices
Unit Sugar No 5- LiffeMay'13 Futures Sugar No 11-ICE May '13 Futures $/tonne $/tonne Last 489.2 387.33

as on May 10, 2013 % Change Prev day WoW 0.62 -0.23 -1.53 -0.57 MoM -3.40 -1.64 YoY -12.19 -14.01

.Source: Reuters

Technical Chart - Sugar

NCDEX June contract

Domestic Production and Exports


According to ISMA, Indias Sugar production between October April stood at 24.52 mn tn, lower by 3% during the same period last year. Maharashtras production dipped 10% to 8 mn tn while production in Uttar Pradesh increased by 7% to 7.43 mn tn.
India is likely to produce 24.6 mn tn of sugar in 2012-13 year ending on Sept. 30, higher than the previous estimate of 24.3 mn tn, the Indian Sugar Mills Association (ISMA) said last week. With the opening stocks of 6.5 mn tn, domestic Sugar supplies are estimated at 30.8 mn tn against the domestic consumption of around 22. 5 mln tn for 2012-13. Exports are not viable as international prices have also declined significantly. A severe drought in top sugar producing Maharashtra state has been affecting new plantation and is likely to affect on sugar production in the year starting from Oct. 1, 2013.
Source: Telequote

Technical Outlook
Contract Sugar May NCDEX Futures Unit Rs./qtl Support

valid for May 11, 2013 Resistance 3035-3060

Global Sugar Updates


Liffe Sugar recovered from lower levels on account of short coverings and settled 0.62% higher while ICE sugar declined 0.23% on Friday on account of improvement in the pace of cane crush in Brazil supported by favorable weather. Cool, dry weather in Brazil has boosted cane crushing and will allow uninterrupted exports. Sugar prices in the international markets are trading at their lowest levels in since July 2010 on account of a global surplus situation for the third consecutive year. According to Unica, South-Central Brazil cane crush projected at 589.60 million tons for 2013/2014. Main center-south sugar cane crop will produce a record 35.5 mn tn of sugar in the 2013/14 season, higher by 4.1% compared to 34.1 mn tn last year. Expectations of abundant supplies from the 2013-14 harvest in the other leading producers, such as Thailand, Mexico and the United States have kept prices under pressure. Sugar prices are trading around 2 year lows.

2980-3000

Outlook
Sugar prices are expected to gain on account of improvement in demand from the bulk manufacturers. Sentiments are expected to remain positive as government has notified cabinets decision to remove two key controls on sugar sector. Weak international prices may cap sharp gains.

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Commodities Daily Report


Saturday| May 11, 2013

Agricultural Commodities
Oilseeds
Soybean: Soybean futures traded on a positive note on account of
poor supplies in the domestic markets. However gains were capped due to weak meal export demand. IMDs prediction of a normal rd monsoon also pressurized prices. According to the 3 advance estimates, Soybean output is pegged at 14.14 mn tonnes. The spot as well as the Futures settled 0.77% and 0.75% higher on Friday. Special Margin (in Cash) of 10% on the Long side has be imposed in Soyabean May 2013, June 2013 & July 2013 expiry contracts with effect from beginning of day Tuesday, April 30, 2013. Indias soy meal exports in April are likely to fall to 200,000 tonnes, down 36 percent from a year ago, unless buying from Iran improves. Exports of Soybean meal during March, 2013 was 3,20,265 tonnes as compared to 4,61,892 tonnes in March, 2012 lower by 30.66% y-o-y.

Market Highlights
% Change Unit Soybean Spot- NCDEX (Indore) Soybean- NCDEX May '13 Futures Ref Soy oil SpotNCDEX(Indore) Ref Soy oil- NCDEX May '13 Futures Rs/qtl Rs/qtl Rs/10 kgs Rs/10 kgs Last 4052 4031 724.5 715.6 Prev day 0.77 0.79 0.36 0.16

as on May 10, 2013

WoW 1.15 2.04 -1.32 -0.49

MoM -3.04 -4.26 -0.65 -1.07

YoY 13.66 14.03 -2.38 -4.23

Source: Reuters

International Markets
Soybean declined 0.2% on Friday after the USDA monthly report forecast ending stocks in 2013-14 to double to 265 mn bushels against 125 mn bushels in 2012-13. Also 2013-14 US soybean production is projected at 3.39 billion bushels. However, delays in planting in the Midwest coupled with tight supplies of the old soy crop cushioned prices. Large South American crop coupled with forecasts for US weather to improve in the coming week have capped sharp gains. Sentiments remain weak on account of smooth supplies from Brazil coupled with demand fears amid bird flu in China. Chinas soybean imports were reported at 3.98 mn tonnes in April, lower by 18.4% in April last year, but marginally higher compared to 3.84 mn tonnes in March. The decline is attributed to delays in shipment from Brazil coupled with weak demand on the back of outbreak of the bird flu. Brazil's government lowered its forecast for the 2012/13 soybean crop from 82.1mn tn to 81.9 mn tn.
International Prices Soybean- CBOTMay'13 Futures Soybean Oil - CBOTMay'13 Futures Unit USc/ Bushel USc/lbs Last 1488 49.17 Prev day -0.20 0.20 WoW 2.29 0.02

as on May 10, 2013 MoM 6.86 -1.72


Source: Reuters

YoY 2.48 -7.49

Crude Palm Oil

as on May 10, 2013 % Change Prev day WoW 0.09 1.58 2.64 3.19

Unit
CPO-Bursa Malaysia May '13 Contract CPO-MCX- May '13 Futures

Last 2290 469.2

MoM -3.01 0.77

YoY -31.74 -22.94

MYR/Tonne Rs/10 kg

Source: Reuters

Refined Soy Oil: Ref soy oil as well as MCX CPO settled 0.15% and
1.58% higher on Friday tracking positive soybean prices prices. Indian government increased the base import price on crude soybean oil by US $9/tn to US $1103. Besides, base import price on crude palm oil set at US $ 824 and reduced base import price on palmolein crude as well as refined to US $ 864/tn and US $861/tn. Imports of all vegetable oils, including non-edible oils, fell 7.5 per cent to 896,714 tn in March, pulled down by the drop in palm oil imports. Palm oil imports dropped 12% to 708,262 tn in March. Malaysia, the world's No.2 palm oil producer, set its crude palm oil export tax for May at 4.5%, unchanged from April. Exports of Malaysian palm oil products from April 1-25 increased 5.2% to 1,123,129 tns from 1,067,140 tns shipped during March 125.

RM Seed
Unit RM Seed SpotNCDEX (Jaipur) RM Seed- NCDEX May '13 Futures Rs/100 kgs Rs/100 kgs Last 3425 3419 Prev day 0.32 0.00 WoW 0.74 0.12

as on May 10, 2013 MoM -5.02 -3.85


Source: Reuters

YoY -12.18 -11.38

Technical Chart Soybean

NCDEX June contract

Rape/mustard Seed: Mustard June Futures settled 0.03% lower


on Friday on account of higher supplies of the new crop coupled with higher output expectations. Sowing of Mustard seed is up by 2.2% at 67.23 lakh ha. Agriculture ministry in its third advance estimates, pegged mustard output at 7.36 mn tn, up by 11.5%.

Outlook
Soybean prices may trade on a mixed note today. Poor supplies in the domestic markets may support prices. However, forecast of a normal monsoon coupled with weak meal export demand may pressurize prices. Soy oil may decline on expectations of higher imports. CPO may gain due to higher international prices as well as lower yield period. However, comfortable stock levels may cap sharp upside.

Source: Telequote

Technical Outlook
Contract Soy Oil May NCDEX Futures Soybean NCDEX May Futures RM Seed NCDEX May Futures CPO MCX May Futures Unit Rs./qtl Rs./qtl Rs./qtl Rs./qtl

valid for May 11, 2013 Support 685-688 3850-3875 3430-3445 464-468 Resistance 695-700 3920-3950 3470-3490 473-476

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Commodities Daily Report


Saturday| May 11, 2013

Jeera Agricultural Commodities

Jeera June futures gained from lower levels yesterday on account of short coverings and settled 0.61% higher on Friday. Prices have declined sharply on account of weak demand from the domestic as well as international markets. Higher production estimates have also pressurized prices. Domestic as well as overseas demand is expected to improve in the coming days. According to Gujarat State Agri Dept. sowing in Gujarat is reported at 3.352 lakh ha in 2013 compared with 3.719 lakh ha last year. According to the Rajasthan State Budget 201314, it has exempted jeera from VAT. Supply concerns from Syria and Turkey still exists. Expectations are that export orders may still be diverted to India from the international markets due to lack of supplies from Syria on back of the ongoing civil war. Production in Syria and Turkey is being reported around 17,000 tonnes and around 4,000-5,000 tonnes, lesser than expectations. Jeera prices of Indian origin are being offered in the international market at $2,425 tn (FOB Mumbai) while Syria and Turkey are not offering. Carryover stocks of Jeera in the domestic market is expected to be around 8-9 lakh bags.

Market Highlights
Unit Jeera Spot- NCDEX (Unjha) Jeera- NCDEX May '13 Futures Rs/qtl Rs/qtl Last 13411 12785 Prev day 0.00 0.65

as on May 10, 2013 % Change WoW -0.06 -0.60 MoM -2.52 -6.58 YoY -1.15 -4.27

Source: Reuters

Technical Chart Jeera

NCDEX June contract

Production, Arrivals and Exports


Arrivals in Unjha were reported at 13,000 lakh bags on Friday. Production of Jeera in 2012-13 is expected around 38-40 lakh bags (55 kgs each), same as last year. Exports of Jeera between Apr 2012- Jan 2013 stood at 64,400 tn, an increase of up 86%. (Source: Factiva)

Outlook
Jeera Futures is expected to trade sideways with a negative bias today. Higher output and weak demand may pressurize prices. However, any improvement in overseas as well as domestic demand may support prices. Overall trend remain positive for the Jeera prices as they are likely to stay firm as Syria & Turkey have stopped shipments.

Source: Telequote

Market Highlights
Prev day 0.75 1.81

as on May 10, 2013 % Change

Unit Turmeric SpotNCDEX (N'zmbad) Turmeric- NCDEX May '13 Futures Rs/qtl Rs/qtl

Last 6060 5976

WoW -3.43 -5.05

MoM -7.52 -13.19

YoY 70.21 54.66

Turmeric
Turmeric June Futures recovered from lower levels on account of short coverings and settled 0.57% higher. The spot also remained higher and gained 0.75%. Prices have declined sharply on account of higher supplies and huge carryover stocks. Domestic as well as overseas demand is also reported to be weak. However, there are expectations of improvement in overseas demand in June. Unseasonal rains in Andhra Pradesh have damaged about 9240 tonnes of turmeric earlier.

Technical Chart Turmeric

NCDEX June contract

Production, Arrivals and Exports


Arrivals in Erode and Nizamabad mandi were reported at 3,500 and 8,000 bags respectively on Friday. Expectations are that production may be lower by 40-50%. There are reports of some crop damage in Erode region. Turmeric production in 2012-13 is expected around 45 lakh bags. Production in Nizamabad is expected around 12 lakh bags. Production in 2011-12 is projected at historical high of 10.62 lakh tn. It is estimated that next years carryover stocks would be around 10 lakh bags. According to Spices Board of India, exports of Turmeric in April 2012 increased by 1% at 7,300 tn as compared to 7,230 tn in April 2011. Outlook Turmeric is expected to trade sideways with a negative bias today. Weak exports data coupled with higher supplies of the fresh crop and huge carryover stocks may pressurize prices at higher levels. However, expectations of improvement in export demand coupled as well as demand from stockists may support prices at lower levels. Crop damage and output concerns may also support prices at lower levels.

Source: Telequote

Technical Outlook
Unit Jeera NCDEX May Futures Turmeric NCDEX May Futures Rs/qtl Rs/qtl

Valid for May 11, 2013


Support 12720-12810 5850-5940 Resistance 12940-13000 6070-6140

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Commodities Daily Report


Saturday| May 11, 2013

Agricultural Commodities
Kapas
NCDEX Kapas as well as MCX Cotton settled 0.44% and 1% higher on Friday on account of lower farmer selling and positive prices in the international markets. Emergence of fresh demand at lower price levels also supported prices. However, government agencies CCI and NAFED will offload stocks in May after an unsuccessful bid to offload of 2.5 lakh bales of cotton in April 2013 capped sharp gains. The Cotton Corporation of India (CCI) and the National Agricultural Cooperative Marketing Federation of India (NAFED) are expected to offload over 8 lakh cotton bales (a bale weighs 170 kg) in the domestic market this month and the asking price may be lower by Rs 1,000 per candy than the previous price. In April, the government had offered a price of Rs 39,500 per candy, which received lukewarm response from the textile industry. (Source:
Economic Times dated 6th May 2013)

Market Highlights
Unit Rs/20 kgs Rs/Bale Last 1036 18150

as on May 10, 2013 % Change Prev. day WoW 0.44 -0.86 1.00 -0.27 MoM YoY -3.99 -2.91 -0.27 4.19

NCDEX Kapas Apr Futures MCX Cotton May Futures

Source: Reuters

International Prices
ICE Cotton Cot look A Index Unit USc/Lbs Last 86.48 95.1

as on May 10, 2013 % Change Prev day WoW -1.64 2.08 0.11 1.71 MoM 2.17 3.20 YoY 9.72 8.75

India's imports of cotton this year could reach 1.5 mn bales, missing earlier estimates of more than 2 mn as the govt may to start selling its stockpiles. Cotton supplies since the beginning of the year in October 2012 until February 10, 2013 were down at 183.4 lakh bales, down from 189.27 lakh bales a year earlier.

Source: Reuters

Technical Chart - Kapas

NCDEX April contract

Domestic Production and Consumption


CAB in its latest meet has projected cotton crop at 34 mn bales for 201213 season compared to the previous estimates of 33 mn bales. Mill consumption is expected to go up from 22.3 million bales last year to 23.5 million bales. Exports are estimated at 8.1 mn bales. While Import are estimated 2.5 mn bales.

Global Cotton Updates


ICE Cotton futures fell sharply on Friday and settled 1.64% after the USDA monthly crop report forecast a sharp rise in the in the cotton stockpiles by almost 10%. U.S. plantings delays which prompted worry over upcoming supplies had boosted prices from lower levels earlier this week. US export sales for the week ending April 25 reached 314,400 running bales, up 32% from previous week and most since mid-January. According to China Cotton Association, China will continue with its stockpiling policy this year which will boost imports. According to the USDA report, planting intentions for the 2013-14 season are said to be at a 4 year low. Also, there are expectations of good export demand from China. Reports of India and China releasing stocks from the state reserve led to a decline in the prices. USDA has initially forecasted US Cotton acreage for 2013-14 season, at smallest in 20 yrs, however, with recent surge in prices, farmers may decide to plant more cotton. The planting intention data is schedule to be released on 28th march 2013.
Source: Telequote

Technical Chart - Cotton

MCX May contract

Source: Telequote

Outlook
We expect Cotton prices to trade on mixed note today. Prices may decline as offloading from the state reserves may ease supplies in the short term. weak international markets may also pressurize prices. However, improving demand at lower levels may support prices. US cotton planting intentions were reported at a 4 year low. China will continue its stockpiling policy, may also support prices.

Technical Outlook
Contract Kapas NCDEX April 14 Fut Cotton MCX May Futures Unit Rs/20 kgs Rs/bale

valid for May 11, 2013 Support 1015-1025 18190-18290 Resistance 1045-1060 18450-18530

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